S'pore scraps 3G auction

The government has cancelled its third generation (3G) mobile license auction which was slated for April 23.

SINGAPORE--The government has cancelled its third generation (3G) mobile license auction which was slated for April 23.

According to the Info-communications Development Authority of Singapore (IDA), the three bidders--MobileOne (Asia) Pte Ltd, Singapore Telecom Mobile Pte Ltd and StarHub Mobile Pte Ltd--have chosen different blocks of spectrum.

"In accordance with the auction rules, as no more than one offer was made in respect of each 3G spectrum right, the auction will not proceed," IDA said in a statement this afternoon.

M1, SingTel and StarHub will each get a license at S$100 million, and full payment is required by April 23.

This followed Hong Kong-based Sunday Communications Ltd's withdrawal from the local 3G race. Sunday group managing director Craig Ehrlich explained that the company did not have time to secure complete project financing.

The IDA was prepared to issue up to four licenses initially.

Sunday's exit from the local 3G scene was not surprising to many analysts. "Looking at the overall economic climate, it remains challenging for any company to raise resources to rollout a 3G network," said Frost & Sullivan Asia Pacific industry manager (Telecommunications) Manoj Menon.

The decision to scrap the auction was a given as there were only three bidders, said an analyst with a foreign brokerage.

When contacted, M1 spokesperson Chua Swee Kiat said the company has "the necessary financing arrangement in place to pay for the license on April 23."

Chua declined to elaborate on funding as well as the spectrum alloted.

Meanwhile, StarHub assistant vice president for Marketing Patricia Sharma said that the license acquisition will be internally funded, noting that it received spectrum A rights (see table below.)

SingTel declined to comment on its financing but said it received spectrum B rights.

For 3G network rollout, M1 expects to spend an additional S$500 million over five years while StarHub maintained that it will spend between S$500 million and S$600 million over the next five to 10 years.

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